International Journal of Social Science and Business (IJSSB)

The Nigerian banking industry has been confronted by an increasing incidence of huge loan defaults that has called management competence into question. Banks encounter a lot of loans recovery predicaments. Thus, the major problem is that of devising appropriate lending principle, set effective standards for evaluating credit worthiness of customers, employ efficient procedures for processing loans and advances to customers, and to implement monetary control and recovery of loans and advances in order to reduce the problem of bad and doubtful loans and increase profitability. This research work has the objective of evaluating the impact of credit control mechanisms on profitability of Nigerian commercial Banks, with particular emphasis on Unity bank Plc. The study is a survey research and both primary and secondary sources of data were applied. Formulated hypotheses were tested using Chi-square method derived from the Kendal coefficient of concordance. The findings of the study revealed that there is a relationship between the credit control mechanism of Nigerian commercial banks and profitability, also there is effective standard for evaluating credit worthiness of customers in Unity bank Plc, and Credit risks have been reduced in Unity bank through effective control mechanism. The study recommends that Nigerian commercial Banks should maintain a higher level of increase in provision for bad and doubtful debt to compensate any default for loan repayment and still maximize profit. They should also charge interest at higher rate on over due debts and give more incentives for early repayment of loans as means of discouraging defaults in loan repayment.